The commercial real estate industry experienced a tremendous 2017; just ask any broker or owner that specialized in the industrial sector. Thanks to growing demand in e-commerce and companies looking for better facilities, the sector remains the hottest of all. Retail continues to be an interesting topic of discussion as retailers try to stay nimble to find ways to bring people back to brick and mortar. Just ask Collier’s very own National Director of Retail Services USA, Anjee Solanki. Having said all that, my specialty is the office sector which is what the rest of this post will focus on. Here are my personal key takeaways from 2017 and predictions for 2018:
The best way to absorb vacant office space is to hire more employees. With the national unemployment rate at 4.1% it’s no surprise that much of my own business in 2017 was leasing office space to companies that were either expanding their existing offices or moving out of shared office space into their own facilities. The question is whether or not the hiring pace will continue. You can read more about that in Colliers’ State of the US Market and 2018 Outlook Report by our very own Andrew Nelson.
The Open Office Concept
Many companies took the plunge this year towards a new, open-office design concept. However, it’s not the open office that we’ve discussed in the past. Since many employees and companies have discovered that an entirely open office yields more noise, distractions and lack of privacy, many have adopted a hybrid of the old and new. The new office features more huddle areas, shared conference space or hoteling rooms and other amenity spaces within the office. These spaces give employees a chance to work in an enclosed area which gives much-needed privacy for those having private conversations or working on sensitive material while the open areas provide a more collaborative place to interact.
CRE tech has been a trending topic for a few years now. In my opinion, 2017 was the year that it finally emerged as a dominant sector to all in the industry. If you’re not paying attention to CRE tech, you’ve got some catching up to do. Whether the topic is data aggregation sites useful for brokers, virtual reality tours, augmented reality, new and exciting technology useful for marketing vacant space or even the emergence of autonomous driving and the impact it will have on parking, there are many interesting developments that we should all be paying attention to. CRE companies, like Colliers International, are committed to innovation within the CRE tech space. Colliers International recently announced the launch of the Colliers Proptech Accelerator powered by Techstars.
Am I really adding amenities to my list? Yes! It’s nothing new. Actually, it’s a fairly old concept at this point. But it’s become such a desired factor for any building or space that I can’t help but mention it. Owners are looking for a competitive advantage to help attract new tenants and retain existing tenants that might be looking to relocate. And we aren’t just talking about fitness centers, cafes or building wi-fi. Building owners are finding ways to differentiate themselves from the rest of the pack by adding other features like Amazon lockers, smart building technologies, roof-top terraces, high speed connectivity and so much more. Some companies are even looking to outdoor spaces to enhance their employees’ health and wellness. With so many options available to tenants, owners need to find ways to make their facilities stand out and adding new and exciting amenities is the perfect way to do just that. Remember, recruitment and retention is all the rage for companies worldwide. How are you going to make your building or your office space an exciting place for your tenants or your company to showcase its culture and brand?
There are many reasons to be excited about CRE in 2018; the evolution of CRE tech, the transformation of the work workplace, particularly how it effects the workforce, job growth and so much more. All of which will benefit owners and tenants alike. Let’s continue the conversation so we can collectively find new and better ways to evolve. Here’s to an exciting and prosperous 2018!
Based in Princeton, N.J., Vinny specializes in tenant and landlord representation for Colliers International, working directly with his clients in the acquisition and disposition of office space. For more commercial real estate insight and trends, follow Vinny on Twitter.